Online shopping trends of major concern

The safety of digital payments remains a concern among online shoppers across Africa. This is according to Mastercard’s 2014 Online Shopping Behaviour Study, which tracks consumer attitudes and activity online.

The survey was conducted in 11 countries across Africa and the Middle East between November 2013 and January 2014.

1. Security remains a concern

The survey found that South African shoppers feel secure payment methods are crucial when purchasing goods online. Some 42% of respondents cited concern around the safety of online transactions as the reason they had not shopped online in the last three months, up from 4% last year.

Security was also cited by 69% of Nigerian respondents as the reason they had not shopped online in the last three months, followed by 59% of those in Kenya, 47% in Egypt and 43% in Morocco.

When asked how online shopping could be improved, 53% of South African respondents suggested assurances that their transactions are secure, while 52% recommended protection against crooked websites. Another 48% suggested guarantees by financial transaction companies or banks that websites are safe.

Despite these concerns over security, 69% of South African respondents had made at least one purchase online in the last three months, with 87% being satisfied with their experience.

“Consumers want to shop online but they are still nervous about doing so,” says Philip Panaino, division president for Mastercard South Africa, adding that the survey confirms that mandating secure card payments is important to ensuring the sustainability of South Africa’s e-commerce industry.

Retaining a human element in the purchasing process reassures shoppers – 82% of respondents stated that customer service via online chat or telephone is important when shopping online.

Retailers should also educate shoppers, particularly inexperienced internet users and first-time customers, about the security measures in their online stores, says Arthur Goldstuck, managing director of World Wide Worx.

2. Online shopping is becoming more mainstream

The study found that South Africa’s e-commerce sector is growing. Only 24% of local online spend was on foreign sites, down from 27% last year and 33% in 2012.

Of all five markets surveyed, 53% of Moroccan respondents use the internet primarily for online shopping, slightly higher than 52% of South Africans surveyed, followed by 44% in Egypt and just 4% in Kenya.

“The products that consumers are buying suggest that online shopping is becoming increasingly mainstream, which also bodes well for local retailers,” says Goldstuck. “No longer is online shopping confined to books and DVDs, plane tickets and apps.”

Across all five markets surveyed, travel, clothing, accessories and electronics are the products most often bought online. South African shoppers buying groceries (38%), clothing (34%) and personal care (20%) brands online increased by 7%, 8% and 6% respectively.

“The increases are encouraging as shopping for goods in these categories is more complex. Selecting clothing, for example, requires trust in the retailers’ garment and sizing descriptions,” says Goldstuck.

3. Growth in mobile shopping

Mobile shopping is gaining traction in Africa and 56% of respondents in Kenya and Nigeria had shopped or intended to shop online via their mobile phones. This was followed by 55% of Egyptian consumers, 33% of South African shoppers and 25% of Moroccans.

“When contemplating the future of online shopping in South Africa, and given that 96% of consumers who own a mobile phone access the internet this way, it is unsurprising that mobile shopping is attracting tremendous interest,” Goldstuck says.

The most popular items purchased using a mobile phone included mobile phone apps, music downloads, movie tickets, computer software and coupon/deal site offers.

“Mobile phones are still used frequently to research products and compare prices before purchase in a physical store, but there is a marked increase in the use of mobile banking apps, digital wallets and in-app shopping which indicates increased comfort with the technology,” says Goldstuck. Read more

The future of Telecoms in Africa: The “blueprint for the brave”

Deloitte recently completed an in-depth analysis of the market, its trends, and the drivers of it. Click on the link below to download the full paper.

The future of Telecoms in Africa: The “blueprint for the brave”

Africa can no longer be considered the Dark Continent. Given the rate at which mobile connectivity is growing, it seems only natural that the way business is done will change. But how will Telco’s embrace this change and are they even ready for it? We are convinced that there will be consolidation in the telecommunications sector and inevitably more inbound investment as the market opens up and the economic returns improve.

Indigenous companies, foreign investors, and global players have all made significant investment into the continent or certainly parts of it. Even governments are waking up to the opportunity to regulate and to auction spectrum and licences.

While the future shape is still far from clear, we see four potential scenarios:

  1. Winner takes all – as the markets consolidate quicker than most operators can respond
  2. Turf wars continue as new and existing operators battle it out for the profitable market and are joined by banks trying to protect their core business against mobile payments
  3. New entrants come into the market from adjacent sectors with greater added value than the traditional carriers – foreign media and even advertising groups are viewing telcos as a readymade channel to market and
  4. Owning the hearts, minds, and wallets of consumers is the end goal. Will telcos, who have laid the foundation for connectivity and access, be the winners; or will it be global technology groups, the banks, media, advertisers or retailer giants?

The impact in not just on the industry incumbents, but on all players in their respective value chains (hardware, software, services and people provisioning) as they reposition their offerings to keep in step with an unchartered end-state.

Click here to access the full report.


Microsoft’s OneDrive to take on Google Drive and Dropbox

What does the OneDrive cloud service have going for it? Why, Microsoft’s four-decade legacy and the reputation that goes with it, of course.

Over the years, critics occasionally — and justifiably — slammed Microsoft for cramming too many features into its software. But could that ingrained habit yet work to Microsoft’s advantage as it relaunches its consumer cloud storage service in a young market that’s up for grabs?

Microsoft on Wednesday officially announced the global availability of its rebranded cloud storage service OneDrive. Microsoft originally called the service SkyDrive but was forced to rebrand after British Sky Broadcasting, the biggest pay-television broadcaster in the United Kingdom, sued and won a trademark lawsuit over use of the name. Read more


More data on how mobile payments are common in Africa but smartphone ownership remains a luxury

A Pew Research Center survey consisting of face-to-face interviews conducted among 24,263 people in 24 emerging and developing economies from March 2, 2013 to May 1, 2013 provides another angle on African internet habits.

Findings include how internet use is more common among young people, how cell phone ownership rates are nearing 100%, how smartphone ownership remains a luxury, and how nations with a higher GDP per capita have a higher percentage of internet users.

We’ve summarized the African data below…Read more